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Obama Scolds Insurer Again for Big Premium Jumps

Source: Indianapolis Star

Posted on 10 Feb 2010

A major hike in health insurance premiums for some WellPoint customers in California is continuing to draw criticism from President Barack Obama and renewed energy for advocates of his faltering health-care reforms.

For the second time this week, Obama singled out the nation's largest health insurer and its decision to raise premiums on individual plans by up to 39 percent in California. WellPoint acknowledged that it expects increases on some individual plans in Indiana, though it declined to say how much.

"If we don't act, this is just a preview of coming attractions," Obama said yesterday. "Premiums will continue to rise for folks with insurance, millions more will lose their coverage altogether, our deficits will continue to grow larger. And we have an obligation -- both parties -- to tackle this issue in a serious way."

Obama also cited the rate hike as a reason Congress should advance stalled health-reform legislation.

Kathleen Sebelius, U.S. secretary of Health and Human Services, sent a letter to WellPoint's Anthem Blue Cross calling on the health insurer to publicly justify its decision to raise rates for some holders of individual policies in California by as much as 39 percent.

"Your company's strong financial position makes these rate increases even more difficult to understand," wrote Sebelius, noting that WellPoint earned $2.7 billion in its most recent quarter.

California Insurance Commissioner Steve Poizner, in a letter to WellPoint Chief Executive Angela Braly and Chairman Larry Glasscock, said he has retained an independent actuary to analyze Anthem's proposed rate increases. He also asked the company to delay the increases, set for March 1, until after the review.

The review ordered by Poizner will look at whether Anthem is paying out at least 70 cents of each premium dollar received for benefits, as required by California law. Indiana has no such requirement.

Anthem Blue Cross of California said it will reply to Sebelius promptly. Anthem also said the rising costs borne by some of its customers underscore the need for reform.

WellPoint, which operates Blue Cross and Blue Shield plans in 14 states, is the nation's largest commercial insurer in terms of membership.